The Five Flash Points of the Long-Simmering Obama-Warren Feud

Their recent fight over the Trans-Pacific Partnership is the latest episode in their up-and-down relationship.

President Obama leans in to kiss Senator Elizabeth Warren after making a statement in the State Dining Room of the White House July 17, 2013 in Washington, D.C.
National Journal
Eric Garcia
Add to Briefcase
Eric Garcia
May 12, 2015, 1 a.m.

Pres­id­ent Barack Obama and Sen. Eliza­beth War­ren should have a lot in com­mon. Both are re­l­at­ively wonky former law pro­fess­ors who can be averse to the polit­ic­al press. Obama was seen as a pro­gress­ive al­tern­at­ive to Hil­lary Clin­ton in 2008, and, des­pite her con­stant re­buffs, the Left des­per­ately wants War­ren to oc­cupy that same space today.

But since Obama took the White House, the two have fre­quently clashed on eco­nom­ic is­sues, with the 12-na­tion Trans-Pa­cific Part­ner­ship free-trade deal be­ing the latest ten­sion point. Here is a look back on five times that feuds between War­ren and the White House have spilled out in­to the open.

The Bail­out of the Banks and Tim Geithner

After the fin­an­cial crisis of 2008, War­ren, then a pro­fess­or at Har­vard Law School, be­came the chair­wo­man of the Con­gres­sion­al Over­sight Pan­el, which would be able to re­view ac­tions taken by the Treas­ury De­part­ment dur­ing the bank bail­out.

(RE­LATED: White House Hits Back at Eliza­beth War­ren: ‘There’s No Need for This False Cri­ti­cism’)

Dur­ing that time, War­ren be­came a fre­quent ant­ag­on­ist of Obama’s first treas­ury sec­ret­ary, Tim Geithner. While Geithner nev­er worked for Wall Street be­fore his time as a Cab­in­et of­fi­cial, he was of­ten per­ceived by pro­gress­ives as be­ing too friendly to the fin­an­cial in­dustry and was head of the New York Fed­er­al Re­serve dur­ing the fin­an­cial crisis.

In one hear­ing in 2009, War­ren grilled Geithner about what she felt were dif­fer­ing stand­ards for the con­di­tions of the U.S. auto­mobile-in­dustry bail­out as op­posed to more lax stand­ards for fin­an­cial in­sti­tu­tions that re­ceived bail­out money.

“You’re say­ing there have been changes in man­age­ment?” War­ren asked about fin­an­cial in­sti­tu­tions, to which Geithner re­spon­ded, there were changes at Amer­ic­an In­ter­na­tion­al Group as well as at Fan­nie Mae and Fred­die Mac.

“I am ask­ing about the banks,” War­ren re­spon­ded.

(RE­LATED: Eliza­beth War­ren Wel­comes Wall Street’s Hatred)

“Go­ing for­ward, where in­sti­tu­tions need ex­cep­tion­al levels of as­sist­ance, we will make sure that as­sist­ance comes with con­di­tions that provide for the ne­ces­sary de­gree of ac­count­ab­il­ity, help en­sure these firms emerge stronger rather than weak­er,” Geithner said.

In an­oth­er hear­ing, War­ren probed Geithner about where the money AIG re­ceived from the bail­out in Fed­er­al Re­serve loans went.

“Was Treas­ury aware of who the coun­ter­parties were that were go­ing to re­ceive pay­ment in full on the cred­it-de­fault swaps when $170 bil­lion went to AIG?” War­ren asked.

“They could have known,” Geithner re­spon­ded. “Wheth­er they knew at the time, I’m not sure they knew.”

(RE­LATED: Forever Ready for Eliza­beth War­ren)

AIG re­vealed the com­pan­ies that the com­pan­ies that re­ceived pay­ments from AIG were Gold­man Sachs, Mer­rill Lynch, Cit­ig­roup, and Bank of Amer­ica.

The ap­proach in War­ren’s ques­tion­ing dur­ing this time would largely set the tone for War­ren’s fu­ture feuds with the White House on the premise that it was be­ing too friendly to Wall Street.

Geithner, for his part, did not seem amused by War­ren, writ­ing in his mem­oir, “Her [bail­out] over­sight hear­ings of­ten felt more like made-for-You­Tube in­quis­i­tions than ser­i­ous in­quir­ies.” He called his re­la­tion­ship with War­ren “com­plic­ated.”

Dodd-Frank and the Con­sumer Fin­an­cial Pro­tec­tion Bur­eau

The Con­sumer Fin­an­cial Pro­tec­tion Bur­eau, which was es­tab­lished un­der Dodd-Frank, is of­ten con­sidered a brainchild of War­ren’s. But Geithner wrote in his mem­oir that he be­lieved War­ren would face tough Sen­ate op­pos­i­tion to be head of the agency from Re­pub­lic­ans and some mod­er­ate Demo­crats wary of War­ren. “At a meet­ing with Rahm and Valer­ie, I told the group that if the Pres­id­ent wanted to ap­point War­ren to run the CFPB, I wouldn’t try to talk him out of it,” he wrote “but every­one in the room knew she had no chance of be­ing con­firmed.”

“They didn’t want to vote for a con­tro­ver­sial lib­er­al at a con­ser­vat­ive mo­ment,” he wrote. “They were also wor­ried about the in­tense op­pos­i­tion in the busi­ness com­munity.”

War­ren faced stiff op­pos­i­tion for CFPB from then-White House Chief of Staff Rahm Emanuel, who in­formed Sen. Harry Re­id that “We don’t like her, either,” when a mod­er­ate Demo­crat­ic sen­at­or said he was con­cerned about who would head the agency.

(RE­LATED: Hil­lary Clin­ton Sings Eliza­beth War­ren’s Praises in ‘Time 100’)

War­ren, after help­ing over­see the agency’s cre­ation, ul­ti­mately was passed over for the po­s­i­tion, and the bur­eau was headed by Richard Cordray, though it turned out Cordray would also face fierce con­gres­sion­al op­pos­i­tion.

Larry Sum­mers and the Fed­er­al Re­serve

In his mem­oir, former Obama ad­viser Dav­id Axel­rod wrote that Emanuel as­sured Larry Sum­mers “that he would suc­ceed Ben Bernanke as chair of the Fed­er­al Re­serve when Bernanke’s term ex­pired in 2010.” Obama ini­tially re­appoin­ted Bernanke in 2010. But in 2013, when the idea of Sum­mers be­com­ing chair­man was floated, War­ren op­posed it.

(RE­LATED: Eliza­beth War­ren Slams Big Oil, Says Ma­jor Com­pan­ies Profit From Pol­lu­tion)

A 2013 piece in The Bo­ston Globe showed War­ren and Sum­mers had been split in their views of fin­an­cial reg­u­la­tion, with War­ren largely sup­port­ing the res­tor­a­tion of the Glass-Steagall Act, which sep­ar­ated com­mer­cial and in­vest­ment bank­ing, and whose re­peal Sum­mers over­saw dur­ing the Clin­ton ad­min­is­tra­tion.

Like the rest of the Obama team, Sum­mers’s re­la­tion­ship with War­ren has been com­plic­ated, with Sum­mers serving as pres­id­ent of Har­vard around the same time War­ren was a pro­fess­or there. Sum­mers was also an early sup­port­er of the Con­sumer Fin­an­cial Pro­tec­tion Bur­eau, though he punted on wheth­er she should be head the agency, say­ing, she “is one of the people who would be a ter­rif­ic can­did­ate.”

Sum­mers tried reach­ing out to the Mas­sachu­setts Demo­crat when he was vy­ing to be­come head of the Fed. Ul­ti­mately, War­ren wound up sign­ing a let­ter by Sen. Sher­rod Brown, also seen as a crit­ic of Wall Street, to the White House back­ing Janet Yel­len for the chair­man­ship. Yel­len even­tu­ally won out.

Ant­o­nio Weiss

In Novem­ber, Obama nom­in­ated Ant­o­nio Weiss, glob­al head of in­vest­ment bank­ing for Laz­ard, to be­come un­der­sec­ret­ary for do­mest­ic fin­ance at the Treas­ury De­part­ment. But what should have been a non­con­tro­ver­sial nom­in­a­tion for a low-pro­file job be­came the next is­sue to get in War­ren’s crosshairs.

(RE­LATED: Eliza­beth War­ren Strikes Back at Obama For Call­ing Her ‘Wrong’ On Trade)

War­ren lam­basted Weiss for his in­volve­ment in a cor­por­ate-tax in­ver­sion deal in­volving Bur­ger King buy­ing a Ca­na­dian cof­fee out­let, al­low­ing it to move its tax ad­dress to Canada.

War­ren also cri­ti­cized the ap­point­ment of Weiss on the grounds that it was an­oth­er ex­ample of the con­tinu­ing trend of people mov­ing between Wash­ing­ton and Wall Street.

“This is just one spin of the re­volving door too many,” War­ren said, also say­ing that Weiss was not suf­fi­ciently qual­i­fied.

Ul­ti­mately, Weiss pulled out of his nom­in­a­tion, which al­lowed War­ren to claim a sig­ni­fic­ant polit­ic­al win at the ex­pense of the White House. Weiss in­stead be­came a coun­selor to the treas­ury sec­ret­ary, with re­portedly pro­nounced in­flu­ence.

The Trans-Pa­cific Part­ner­ship and TPA

The latest chapter of Obama and War­ren’s on-again/off-again feud comes in the form of the Trans-Pa­cific Part­ner­ship. In Feb­ru­ary, War­ren wrote an op-ed in The Wash­ing­ton Post cri­ti­ciz­ing a pro­vi­sion in the trade deal known as In­vestor-State Dis­pute Set­tle­ments, which she said could lead to for­eign in­vestors be­ing able to sue for­eign gov­ern­ments in coun­tries where they in­vest. War­ren has warned this could lead to a weak­en­ing of labor and en­vir­on­ment­al rules.

In turn, the White House has tried re­spond­ing by say­ing it would pro­mote strong safe­guards and high­er stand­ards in the pro­vi­sion and called the trade deal “the most pro­gress­ive trade agree­ment in our his­tory,” com­par­ing op­pos­i­tion to it by pro­gress­ives to former Alaska Gov. Sarah Pal­in’s ac­cus­a­tions of “death pan­els” dur­ing the Obama­care de­bate.

But War­ren has con­tin­ued her cri­ti­cism. Last week, dur­ing a speech at the In­sti­tute for New Eco­nom­ic Think­ing, War­ren hit the White House for want­ing Trade Pro­mo­tion Au­thor­ity, which would sub­ject trade deals like TPP to an up-or-down vote without the abil­ity to amend, say­ing a fu­ture Re­pub­lic­an pres­id­ent could use it to dis­mantle Dodd-Frank.

In turn, Obama called War­ren “ab­so­lutely wrong” on trade and on the TPP’s In­vestor-State Dis­pute Set­tle­ment pro­vi­sion in an in­ter­view with Ya­hoo Polit­ics.

“There is no evid­ence that this could ever be used in this way,” Obama said, draw­ing on their mu­tu­al ex­per­i­ence as law-school pro­fess­ors. “One of the things you do as a law pro­fess­or is you spin out hy­po­thet­ic­als and this is all hy­po­thet­ic­al.”

Obama also sniped at War­ren, call­ing her “a politi­cian just like every­body else, and she’s got a voice that she wants to get out there,” be­fore not­ing, on most is­sues, “she and I deeply agree.”

But War­ren re­spon­ded in an in­ter­view pub­lished Monday with The Wash­ing­ton Post, say­ing, “If the pres­id­ent has changed ISDS to solve the prob­lem, then the text should be re­leased so that leg­al ex­perts can look at it.”

It is no co­in­cid­ence that most of War­ren and Obama’s dis­putes have centered around Wall Street and eco­nom­ic policy. Obama was elec­ted shortly after a num­ber of the coun­try’s top fin­an­cial in­sti­tu­tions crashed and sold him­self as someone fight­ing for fair­ness. War­ren’s cri­tique chal­lenges that nar­rat­ive and paints him as hir­ing ad­visers close to the wealth­i­est in­dus­tries and im­ple­ment­ing policies that em­bolden Wall Street.

There is evid­ence War­ren’s voice is win­ning. Many Demo­crats now run­ning for high­er of­fice are op­pos­ing the TPP, which not only could sink the trade deal, but ser­i­ously dam­age Obama’s im­age among lib­er­als as someone who fights for shared prosper­ity, and it could al­low War­ren to take over that mantle even more than she already has.

Cor­rec­tion: A pre­vi­ous ver­sion of this story mis­stated Timothy Geithner’s po­s­i­tion on wheth­er War­ren should head the CFPB after it was es­tab­lished. This story has also been up­dated to re­flect Ant­o­nio Weiss’ role at Treas­ury.

What We're Following See More »
JUST AS SENATE VOTES ITS DISAPPROVAL
Trump Backtracks on Putin's "Incredible Offer"
3 days ago
THE LATEST
ARMS CONTROL, SYRIA WERE DISCUSSED
Russians Refer to "Verbal Agreements" with Trump
3 days ago
THE LATEST

"Two days after President Trump’s summit with Russian President Vladi­mir Putin, Russian officials offered a string of assertions about what the two leaders had achieved. 'Important verbal agreements' were reached at the Helsinki meeting, Russia’s ambassador to the United States, Anatoly Antonov, told reporters in Moscow Wednesday, including preservation of the New Start and INF agreements," and cooperation in Syria.

Source:
WAS "GRUDGINGLY" CONVINCED
Trump Was Shown Proof of Russian Interference Before Inauguration
3 days ago
THE LATEST

"Two weeks before his inauguration, Donald J. Trump was shown highly classified intelligence indicating that President Vladimir V. Putin of Russia had personally ordered complex cyberattacks to sway the 2016 American election. The evidence included texts and emails from Russian military officers and information gleaned from a top-secret source close to Mr. Putin, who had described to the C.I.A. how the Kremlin decided to execute its campaign of hacking and disinformation. Mr. Trump sounded grudgingly convinced, according to several people who attended the intelligence briefing. But ever since, Mr. Trump has tried to cloud the very clear findings that he received on Jan. 6, 2017, which his own intelligence leaders have unanimously endorsed."

TAKE THAT, HATERS
Trump: High IQ People Loved the Putin Meeting
4 days ago
THE LATEST
"POLICY DIFFERENCES DON'T MATTER"
Comey Says to Vote Democratic This Fall
4 days ago
THE LATEST
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login